A Bold Move: Short S&P 500, Long Gold Miners

Share This Article
October 25, 2018 6:58am NYSE:GDX

From Chris Kimble: The precious metals sector continues to be a “grind”, offering a few trades but mostly sideways to lower action. Gold prices have slogged along and this had held the Gold Miners (GDX) back… until recently.


The Gold Miners (GDX) and the broader Gold & Silver Miners Index (XAU) came to life in September and October.

The miners are in a multi-year down trend, however there is a potential bullish setup in place. See the chart below where we highlight the ratio of the Mining Index (XAU) to the S&P 500 (SPY). The ratio, which Gold Bugs want to see rising, looks to have created a bullish reversal last month at the 2016 lows at point (1).

And October is seeing a follow-through move to the upside.

If the ratio breaks out above falling resistance at (2), it would be suggesting a long miners / short S&P 500 trade.

Mining Index (XAU) / S&P 500 (SPY) Ratio Chart

CLICK ON CHART TO ENLARGE

This article was first written for See It Markets.com. To see original post CLICK HERE

If you are interested in taking advantage of opportunities in the metals market, check out our Gold, Silver, and Miners weekly report.


The VanEck Vectors Gold Miners ETF (GDX) was unchanged in premarket trading Thursday. Year-to-date, GDX has declined -14.50%, versus a -0.18% rise in the benchmark S&P 500 index during the same period.

GDX currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #8 of 35 ETFs in the Precious Metals ETFs category.


This article is brought to you courtesy of Kimble Charting Solutions.


Read Next



Get Free Updates

Join over 50,000 investors who get the latest news from ETFDailyNews.com!

Most Popular


From Our Partners


Explore More from ETFDailyNews.com

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again!

ETFDailyNews.com respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories